LUMO Labs and BOM: Working on the same puzzle

Interview with Gert-Jan Vaessen, Manager Brabant Ventures at the Brabant Development Agency (BOM)

Gert-Jan Vaessen, Manager Brabant Ventures at the Brabant Development Agency, has known co-founders Andy Lürling and Sven Bakkes since before there technically was a LUMO Labs.

“I’ve known LUMO since they started. Very interesting guys … very entrepreneurial,” Gert-Jan says. “They’re interesting in their view. Interesting in their approach. Their approach is un-Dutch, and that’s what I like.”

Brabantse Ontwikkelings Maatschappij, or BOM, a public investment fund capitalized by the Dutch government, is an investor in LUMO Fund II. Gert-Jan, who spent two years working as a venture capitalist in Boston, compares Andy’s and Sven’s approach to how the Massachusetts Institute of Technology drives innovation by encouraging entrepreneurship.

“It’s more MIT,” he said. “That attracted me from the beginning.”

Gert-Jan was impressed enough to ultimately advocate for LUMO Labs with BOM’s investment committee, which manages 300 million euros in capital. BOM is indeed a LUMO Labs investor, but with different goals and expectations than most investors.

Sovereign investment funds such as BOM expect to recoup their capital back plus a return so they can make future investments. Yet, as BOM analyzed its own investment strategy, executives decided returns could not be the sole criterion for a fund-to-fund investment.

“So, we have a dual strategy. We want to invest in good, solid funds, and the Brabant economy should benefit from it,” Gert-Jan said. Gert-Jan holds up LUMO Labs as a fund that’s doing everything right … and doing it before other funds in Europe, including impact investing, the concept that new technologies shouldn’t merely yield a profit for LUMO investors but should solve real-world problems.

It’s a paradigm shift, Gert-Jan said. Not too long ago, making money and making a social impact were two different things. Now, the startup world not only knows they’re complimentary, it’s becoming a global trend.

BOM invests in funds such as LUMO Labs that are “deeper in the ecosystem with more impact. Not a return kind of impact, but for the ecosystem, for the knowledge base or because they have a huge benefit in the themes we’re supporting,” he says.

Of course, BOM has an investment selection process and an independent investment committee. “So, we also have to sell our story internally,” Gert-Jan said. “ ‘Why LUMO Labs?’ I’m convinced we were able to convince that investment committee through the impact axis, and not the return axis.

“So, these are our impact guys.”

Another selling point for BOM is that LUMO Lab is focusing on artificial intelligence, and Gert-Jan said BOM officials believe the Brabant ecosystem needs support in that direction: “It’s still early stage in Brabant, so everything LUMO does is spot on for us.”

That said, there were some challenges before BOM could fully embrace LUMO … changes that helped cement the relationship.

LUMO had a few growing pains, Gert-Jan said, with BOM executives suggesting Andy and Sven refine their fund investment strategy. But what separates Andy and Sven from the rest of the fund managers he’s dealt with is that they’re open and receptive to constructive criticism and advice.

“Some fund managers might be reluctant initially to totally buy into BOM’s recommendations. Not Andy and Sven,” Gert-Jan said.” They listened to us and recognized we were right. They were not only able, but they were willing to delete their entire fund documentation. They said, ‘BOM, help us structure our fund in a proper way and get to the next level.’ The fact they were open and willing to listen to us … to our view about a more next-level way of structuring funds … the way they dealt with it was brilliant.

“That attitude is exactly why I say, ‘These guys will get there.’ “

More than an economic-development agency, BOM’s mission is to build Brabant’s ecosystem. To do that, BOM wants to connect local – LUMO Labs – to regional – BOM – and to national innovation efforts.

“We also find connections outside our borders,” Gert-Jan says. “In that sense, LUMO is part of the BOM structure. That says everything about how we work together. We’re part of the same puzzle. That’s what you do … you do it together. An ecosystem that’s an island doesn’t work.”